I often get questions along the lines of, “What do I do if my client doesn’t pay me?” Or, “Are there special methods for chasing up unpaid invoices?”

So what happens when a client/customer doesn’t pay you?

Not all clients are great clients and occasionally you meet a client that doesn’t pay you. It’s rare, but it sometimes happens. When it does, it sucks. But there are things we can do about it.

So what can you do?

This post seeks to answer that question and provide you with a number of solutions to the non-paying client situation.

A Story To Get Your Blood Boiling

A close friend of mine owns a web design company (yes, non-video production business). He took on a very large client 5 years ago. This client wow-ed my friend with his background, his passion and, most of all, the companies he’d worked for in the past.

I won’t go into the details, but it was a web design project for a startup (yes, warning bells!) and the guy running the startup had this amazing track-record on paper. At least, it appeared that way to my friend.

So, my friend (who hadn’t exactly been in business for all that long) took this guy’s word and story at face value. And he did something he wouldn’t normally do: he did work for the client without a deposit or any kind of initial payment to secure the project.

Long story short, the guy had every story under the sun for why he couldn’t pay. Eventually, the troublesome client paid an initial payment, but in hindsight that was just to get more free web design work out of my friend.

When the dust settled, my friend’s company had ended up doing way more spec work than they’d ever normally do and hadn’t even been paid for any of the rounds after the initial payment.

Again came the excuses from the troublesome client. He came out with everything other than the time-tested, “My dog ate it!” as to why he couldn’t send them a cheque.

Eventually, the client did a total disappearing act. My friend had done around 60 hours of work and was out of pocket multiple thousands on what he was owed for the project. Not to mention billable hours for his staff designers and people following up with the guy constantly.

It was a big lesson learned for my friend. Never again would he do work without securing a contract and getting a large chunk of the money upfront.

So what happened to the guy, I’m sure you’re wondering? Well, we never did find out. He disappeared into the ether somewhere, along with his story and background references. We imagine he conned a lot of people, probably owed a lot of money and the “business” he was “running” simply disappeared from sight.


Blood boiling? Worried? Don’t be — there are ways of handling things, so that you don’t get left holding the bag like my friend.

First, let’s talk about pre-empting someone being a non-payer. Because tackling the cause is always better than tackling the symptom.

After that, we’ll talk about methods for getting paid when a client is avoiding paying you.

Get Paid Up Front

Getting paid in advance is the most obvious solution to this potential problem. So that’s why I’ve listed it first.

If you’re paid up front for the work you do, before you do any work at all, then a client can never owe you money. Because you wouldn’t do work for them if you hadn’t received payment yet.

Obviously, if it’s a large corporate project, you’re not going to request the full amount upfront. But a good will gesture of 30% (or more) before you begin is a good way for the client to present themselves as well meaning.

When I was shooting weddings, we would require payment in full before the wedding day itself.

Getting paid upfront is just smart.

In the words of Mike Monteiro, “Starting work without a contract is like putting a condom on after you’ve taken a home pregnancy test.”

Put It In The Contract

I have been rather fortunate in the majority of my clients, as I haven’t had too many problems. Touch wood.

However, back in the past I had a few incidents. My mentor at the time advised me to put on all invoices a small statement saying something like the following:

“All Accounts without prior written arrangements, will be sent to collections with the cost of collecting being the responsibility of the debtor.”

Then to send out 30, 60 and then a final 90 day statement nicely saying this would indeed be sent to collections if payment and/or arrangements could not be made and then to actually do so.

I say collect the debt and then fire the client. In that order. Then obviously not to do any more work until the bill has been satisfied.

When fleshing out a contract:

  • Set deadlines. Both for when the work is to be produced and when the payment is expected.
  • Set reasonable terms about debt collection in the event of non-payment. Make this clear on the contract and all invoices.
  • Frame the relationship from the start. Ensure that you keep each other in the loop by mentioning this as a requisite in your initial meetings and in the contract. Instruct your client that if they run into difficulties, they need to let you know ASAP.

Employ A Client Chasing Service / Debt Collection Agency

There are plenty of services that, for a fee, will go after the client who isn’t paying you.

Before engaging one of these services, make sure you have your facts in order:

  • Get everything written down. Check your facts, then check them again. Have you dotted your ‘i’s and crossed your ‘t’s.
  • Includes dates. Dates are powerful and make you look like you know what you’re talking about (even if you don’t always!)
  • Don’t be afraid to quote some Latin. Not only does it sound intimidating, but there is a very good reason for it. Tell them work was done ‘quantum meruit’.
  • Keep track of all correspondence.
  • Make sure you send multiple ‘late payment’ warnings.

In the UK, Pay On Time is a great resource for templates and advice on dealing with late paying clients. There’s even a calculator on their site which helps you calculate late payment interest in accordance with UK law under the Late Payments Act.

Here’s what the Pay On Time website says about the Late Payments Act:

Businesses are entitled to claim compensation when a debt remains unpaid after the date specified on the contract, or in the absence of a contract, 30 days after the delivery of the goods or service.

Derek, from Social Triggers, has some further advice on the persuasion side of this equation.

Get The Lawyers Involved

This should be a ‘last resort’ sort of situation. The minute you get the lawyers involved, you can find yourself in a world of financial hurt…even if you win!

But, if all else fails, some situations (read: for large project fees) require the intervention of legal entities.

I’ve been involved in several small lawsuits over unpaid bills — it is very easy to file in most areas (depending, of course, on your country/state of origin).


If it is a straightforward nonpayment, a judgment is easy to get.

Before filing send messages like “I am worried about this bill and am concerned that I failed you somehow— is everything working and up to the standards we discussed?”

Or say, “Is there anything I can help you with? Is there a concern I have not addressed? I want to give you the best service possible.”

Clients will almost always tell you at this moment if there was a problem or if you did a good job. This approach very much depends on the rapport you have built through the process which is why I prefer to build tons of goodwill during the process.

But if you don’t pay, all the goodwill is gone.

Step 2 is to try to establish payment terms – a 60 day payment or 90 day payment schedule – “I really want to make this easy for you and hate that you feel this should not be paid. Let’s work it out.”

If they will not agree to terms or still will not pay, just go to the court and file a suit to collect. Take your emails with you where they state that everything was delivered.

This is another reason why I get written feedback as a project progresses. At each stage I ask questions about how things are going and how they feel about it so far. It is an opportunity to correct course, or it is ammo for a future judgment.

An Alternative Approach – Just Forget About It

Some clients are just lost causes. You win some, you lose some. Plain and simple.

If it gets to a point where a situation is sapping your energy and taking time away from actually running your business and making money, I would suggest forgetting about it and moving on.

The relief of distancing yourself from that situation, the frustration and stress gone, was well worth it. On one side, the universe has a way of setting itself right, even if it takes time.

In any case, nobody wants to be a debt collector. For me, it just wasn’t worth the hassle, and I felt way better cutting the loss.

These kinds of experiences, however, leave major impressions on the people who have been stung by non-paying clients. I always get my fees 100% upfront. That’s the real cure-all. They can’t not pay if they’ve already paid.

Arbitration Clauses

A lot of people add American Arbitration clauses into all of their agreements.

Short of that, include in the contract the right to transfer the debt in full, without any encumbrances, to a third party collector on the very first day the debt is past due.

So, if the relationship is meaningful, you go to arbitration.

If the relationship is not meaningful, and you just want your money, you sell the thing to a collector and never give it another thought.

These guys can get a judicial judgment, UCC liens, everything. They’ll chase the guy for the rest of his life, serve him at home, tow his car, seize his bank accounts, you name it. Sell it for 50% of whatever they collect and if you get a check, great. If not, you’ve not wasted the time.

But, as discussed earlier, walking away is often the best option. Your mileage may vary on that, though, and really depends on each unique situation.

So, in summary, three options:

1. Walk away.
2. Arbitration if it really matters.
3. Collection.

Fail To Plan, Plan To Fail

The answer is to do everything you can upfront to avoid this happening. As the saying goes…’fail to plan, plan to fail.’

Have a process thats well documented, have a contract or agreement spelling everything out. Yes, everything, including what happens in the event of failure to pay. Plan for the divorce when you’re in the honeymoon stage.

Remember… It’s best to avoid any fight. Especially as those fights often muddy your reputation and may prevent you from getting more work in certain sectors or markets.

I’d strongly recommend that progress payments be properly laid out so you are never behind. Only a tiny amount should be left for the last payment.

One of the best pieces of advice I can give you is: learn to see a bad client coming a mile away.

Your takeaway is to be smart and avoid engagements and situations that ‘just aren’t right,’ or seem too good to be true (they probably are).

Do your homework and plan for the bad situation. Be well documented – daily reports, weekly updates, etc.

If you have a contract that spells out all the remedies and you both agree – their council will strongly advise them to pay or immediately negotiate. Remember that in most countries corporations can’t represent themselves in court – there is a big cost to both sides to take it to a legal level.

If you’re going to fight – go big right from the start – don’t irritate someone, go for the quick kill. As a good friend of mine says: If you’re going to be a bear, be a grizzly bear.

What I Do – My Personal Rules

Here are a few of my personal rules for dealing with client payments and unpaid invoices.

You’re Fired

If you don’t pay me at all, I’m never working with you again, no matter what you tell me. You’re fired as my client.

Get Paid For Each Task

If you have continuous work for me, I don’t start on the next task unless you’ve paid me for the previous task. No matter, how urgent the next one is.

I had this client whom I told that I couldn’t work on the next thing before he didn’t pay for the previous thing. 30 minutes later the money was in my bank account.

Dealing With Small Amounts

With small amounts up to $1000, I’m willing to do the work first after a deposit has been paid, and get paid straight after if the person seems trustworthy.

With bigger projects, I insist on milestone payments of $500 after every completed chunk.

Always Make Attempts To Get Your Unpaid Invoices Paid

If I don’t get paid at all, of course, I will try my best to get the money whether that’s by phone, in person and/or email.

But at some point you’ll just have to accept your losses, and the best thing we can do is set stricter rules for the future. See every non-paying client as a valuable lesson in your business life.

In Conclusion

You need to ask for your money!

Never extend credit.

Those are two of the most important rules in always getting paid.

If you don’t ask for it, you won’t get it. Actually, after some time, do not ask. Tell.

If you’ve followed all the advice about getting your money nicely, then escalate to be more forceful with your requests. If you’ve exhausted all of those friendly options, then it’s time to hire in a debt collection agency, or even lawyer-up.

If you can’t get your money upfront, then the people who don’t pay you are doing you a favor. You don’t want to work with them. You don’t want to chase them around. And you don’t want to waste your time, effort, and emotions on them (especially since that time can be spent more productively on others).

If you provide a quality service (that’s hopefully bought on a continuing basis…otherwise always get it upfront beforehand), people are going to be better off working with you and keeping coming back to you than not.

If they don’t want to/can’t do what’s obviously in their best interests, you don’t want to work with them. And if you have a policy that you do no further work until the last bill due is paid, then you’re getting off easy. You’re only owed for one bill.

People that don’t pay are doing you a favor. You don’t want to chase them around when they’ve actually freed up your time to go after better clients.

With that said, if there’s a way to go after the client and actually get paid without any damage to your own psyche, go for it. I wouldn’t recommend allowing people to just rob you of tens of thousands of dollars. But if you can’t get it, there comes a time to just let it go.

I hope this article on unpaid invoices has been useful for you. Have you been stung by a non-paying client? Have a nightmare story that you’d like to get advice on? Let us know in the comments below. And please feel free to share this article with your friends and colleagues who could make use of the advice here.